Cce, Chandigarh vs M/S.Himalyan Vegi Fruit Ltd

Customs Excise and Service Tax Appellate Tribunal20 January 2015

CitationAppeal No. E/1542/2006-Ex (DB)

Ratio decidendi

The rule this decision rests on

The question of whether an intermediate product is excisable turns on whether it is marketable, and the burden of establishing marketability lies on the Revenue; evidence that a product can merely survive for some days or hours does not by itself establish that it is marketable, following the Supreme Court's decision in Moti Laminates Pvt. Ltd. v. CCE, as applied by the Tribunal in the earlier decision in Smithkline Beecham Pharma (I) Ltd. Where the Revenue seeks to prove marketability by reference to sales made by another manufacturer, that evidence is invalid unless the Revenue first shows that the other manufacturer's product is the same as the assessee's product and that the manufacturing process is the same; without such similarity, inference of marketability cannot be drawn from those sales.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066CIRCUIT BENCH AT CHANDIGARHAppeal No. E/1542/2006-Ex (DB)

(Arising out of OIA No.64/CE/CHD/2006 dt.31.1.2006 passed by CCE (Appeals), Chandigarh)

CCE, Chandigarh Appellants

Vs.

M/s.Himalyan Vegi Fruit Ltd. Respondent

Appearance:

Appellant: Shri Y.P.Sharma, Authorised Representative

Respondent: None

Honble Mr.P.K.Das, Member (Judicial)

Honble Mr.P.S.Pruthi, Member (Technical)

Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

seen

4. Whether order is to be circulated to the Department Authorities?

Yes

Coram: Honble Mr. P.K.Das, Member (Judicial)

Honble Mr.P.S.Pruthi, Member(Technical)

Date of Hearing/decision: 20.01.2015

FINAL ORDER NO.51060/2015

PER: P.K.DAS

Revenue filed this appeal against the impugned order passed by the Commissioner (Appeals), whereby the Adjudication order was set aside and the Respondents appeal was allowed.

2. The Respondent was engaged in the manufacture of Squash, Juices, Fruit drinks, Tinned fruits, Jams, etc. The issue involved in this case is whether Sugar Syrup coming into existence at the intermediate stage during the course of manufacture of the final product is chargeable to duty. The show cause notices were issued, proposing demand of duty for the period from June, 1997 to April, 1998. By Adjudication order, dt.04.01.2000, the Adjudicating authority dropped the proceedings. Revenue filed the appeal before the Commissioner (Appeals). By Order-in-Appeal dated 31.7.2003, the Commissioner (Appeals) allowed the appeal of the Revenue. The Respondent filed the appeal before the Tribunal. By Final Order dt.7.4.2004, the Tribunal remanded the matter to the Adjudicating authority to decide as to whether Sugar Syrup is marketable as such. In de novo proceedings, the adjudicating authority confirmed the demand alongwith interest and imposed penalty. By the impugned order, the Commissioner (Appeals) set aside the Adjudication order. Hence, Revenue filed the present appeal.

3. Heard both sides and perused the records.

4. For the proper appreciation of the case, the relevant finding of the Commissioner (Appeals) is reproduced below:

I have carefully examined the case records including the appellants submissions made in writing and at the time of personal hearing and observe that the main issue to be decided here is whether the sugar syrup manufactured by Appellant for the finished products is marketable or not. The Honble Tribunal in its remand order had observed that the evidence on record is insufficient to show that the sugar syrup is marketable. It had directed by the Tribunal to the Adjudicating Authority to discharge the onus of proving the marketability of the goods in addition to earlier evidence. But the Adjudicating Authority has not produced any fresh evidence. Moreover Adjudicating Authority has no where shown that the product of M/s.Dhampur Inverters Ltd. is the same as that of the appellants or that the process of manufacturing is the same. Without drawing any similarity the comparison is invalid. Inference of marketability cannot be drawn on the basis of sales by M/s. Dhampur Inverters Ltd. This is without prejudice to the plea that purported sale of sugar syrup by Dhampur Inverters Ltd. was already for the purpose of proving the marketability of the sugar syrup.

5. Revenue in the grounds of appeal, contended that the Sugar Syrup has self life, which is sufficient to preserve some days. This Sugar Syrup does not evaporate or loose its form within hours. We find that the Tribunal in the case of CCE & ST, Bangalore-I Vs Smithkline Beecham Pharma (I) Ltd 2014 (308) ELT 732 (Tri-Del) on the identical issue, rejected the appeal filed by the Revenue, following the decision of the Honble Supreme Court in the case of Moti Laminates Pvt.Ltd. Vs CCE 1995 (76) ELT 241 (SC) and held that just because the product can last for a week, it cannot be said that the same is marketable.

5. In view of above discussion, we agree with the findings of the Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected.

(Pronounced in the court)

(P.S.PRUTHI) (P.K.DAS)

MEMBER (TECHNICAL) MEMBER(JUDICIAL)

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